Highlights include Royal Caribbean Cruises, Ltd. (RCL) and Carnival Corporation (CCL).

Shares of Royal Caribbean (RCL) are trading sharply higher this morning after the company reported first-quarter results that exceeded Street expectations, and issued full-year earnings guidance above the current Street consensus estimate.

At first glance, these appear to be very strong numbers. Even after accounting for the reported upside to first quarter estimates, the company’s full-year guidance implies earnings per share for the remainder of the year approximately $0.20 — greater than the current Street consensus view.

The fact that close-in booking patterns remained stable is a good sign, in our opinion. While the current trend towards customers booking cruises closer to the actual departure date limits the amount of visibility in the company’s business, the stabilization of consumer booking trends allows some degree of confidence in forward projections, for both Royal Caribbean and its larger peer, Carnival Corporation (CCL).

The company stated that while discounting continues to be aggressive, it has remained within management’s previous expectations. We consider this to be extremely important, as further discounting could offset the expense reductions the company has been able to implement.

The company reported a loss of $0.17 per share – which was $0.17 above the Street consensus and $0.15 above our estimate.

For the full year, management expects to report earnings of approximately $1.35 – which is $0.38 above the current Street consensus and $0.18 above our estimate.

The company still faces significant challenges in light of the current economic recession, but this report could mark the beginning of stabilization for the company’s operations.

We will further update our outlook and estimates in a report following the company’s conference call to discuss the earnings.

Read the full analyst report on “RCL”
Read the full analyst report on “CCL”
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